FSA to take action on payment protection insurance

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The Financial Services Authority FSA is to take steps to protect consumers in the payment protection insurance PPI market.

New steps are designed to ensure cusotmers are better treated when buying PPI or making complaints about it.

Guidance is to ensure PPI complaints are handled properly and redressed fairly where appropriate, while a new rule will require firms to reopen some 185,000 previously rejected PPI complaints and reassess them.

The FSA will also launch targeted assessments of sales practices for PPI on secured loans and credit cards in a bid to clamp down on mis-selling practices.

Jon Pain, FSA managing director of retail markets, said consumers should not be pressured or deceived into buying PPI, adding that they are entitled to have a policy properly explained to them.

He added: "It is unacceptable that despite previous warnings about poor sales practices, backed by 22 enforcement cases and significant fines, the PPI sector still needs the FSA to intervene on this.

"The industry must show it can act fairly, consistently and in the best interest of consumers."

PPI is an insurance product designed to cover currently outstanding debts.

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2009-09-30 10:49:43 © Moneyextra.com